Harris Finishes Fiscal 05 With Revenue Up, Cost Cuts Planned

July 29, 2005

Harris said its broadcast revenue was up in the fourth quarter compared to a year ago, helped by the acquisition of Encoda Systems.

Revenue in the Broadcast Communications segment was $114.6 million, up from $89.1 million. Operating income was $7.9 million for the quarter, compared to $3.9 million in the year-ago quarter. A company spokesman declined to specify how much of the revenue change was attributable to the Encoda acquisition. The company said broadcast revenue is being driven by HD Radio and HDTV transmission sales, but that growth in those areas was partially offset by "continuing international market softness" for analog and European-standard digital broadcast equipment and from declining sales of legacy automation systems.

In its quarterly report, Harris also reiterated plans, reported here earlier, to cut costs by moving European transmitter production from the United Kingdom to Illinois, outsourcing radio console assembly and cutting 150 to 200 positions in the broadcast division.

The company said these moves will cost it $27 million and that it expects to gain that back in about two years.

For the full year, Harris Broadcast revenue increased to $384.1 million from $287.2 million, again including new revenue from Encoda.

The parent company, meanwhile, said its revenue in the fourth quarter was up 14 percent to $822 million. Total revenue for fiscal 2005 increased by 19 percent to $3 billion. Its fiscal year ended July 1.

Harris said it expects revenue growth in fiscal 2006 to exceed 10 percent.